Interview | “I prefer clear and straightforward rules.” KSA Chair Michel Groothuizen discusses the black market, player protection, and more

Four years after the opening of the regulated Dutch online market, players in the legal market appear to be better protected than ever. The growth of the black market, however, introduces new risks, as well as new challenges for the regulator. We sat down with Michel Groothuizen, Chair of the Netherlands Gambling Authority, to discuss the latest developments in the Dutch gambling market, including black-market growth, player protection, and more.   

You were appointed chair of the Netherlands Gambling Authority a bit over a year ago. What, in your opinion, is particularly noticeable about the state of the Dutch gambling market right now? 

To me, four issues stand out. First, there is the growth of the illegal online market, especially in terms of money. Using our updated methodology, which is based on monitoring search behavior, we now estimate that following the opening of the regulated online market approximately 70% of all money spent on online gambling in the Netherlands went to licensed operators. At present, only half of all the money spent ends up in the regulated market. The other half goes to the illegal market. We find this quite concerning and have therefore increased our focus on combating illegal gambling, especially online.  

“At present, only half of all the money spent ends up in the regulated market” 

Second, this year's increase in the gambling tax rate – with a further increase scheduled for 2026 – appears to have taken a severe toll on the land-based sector. The total number of available land-based slot machines appears to be in significant decline. 

Third, the political situation is quite uncertain. We have had a caretaker government for some time now, and this situation could continue for quite a while longer. As a result, there is no clear vision on how gambling policy should develop further, which leaves us a bit in a lurch when it comes to defining a forward strategy. Specifically, former State Secretary Teun Struycken, who was the responsible junior minister for gambling policy when the government was still fully supported by the Lower House, saw gambling less as just another form of entertainment and more as an activity that is inherently risky. His eventual successor, however, may have a somewhat different view.  

Fourth, since the introduction of stricter player protection measures in October 2024, we hardly see any excesses such as instances where players lose far too much money in a very short period of time. For the most part, players appear to treat the per-operator monthly deposit limit of €350 (€150 for young adults) as a maximum, even though a mechanism for raising these limits is in place. As a result, average monthly losses – on a per-account basis – have decreased from €160 to €115. We see this, especially in combination with the recent absence of major excesses, as a turning point in the market. 

“Since the introduction of stricter player protection measures in October 2024, we hardly see any excesses in the legal market” 

How do you see the role of the Netherlands Gambling Authority? What would you personally like to achieve as the Gambling Authority's chair? 

I think it is important to understand that the Netherlands Gambling Authority is more than just a market supervisor. We also have responsibilities regarding player protection and coordinating gambling-related research.  

On a personal level, I would like the Netherlands Gambling Authority to be an effective organization that matters. If we are looking at the legal market, we see that fines are being paid and that operators adjust their behavior accordingly. However, if we are looking at the illegal market, neither is the case. The reality is that when we are dealing directly with black-market operators, we are not effective, and we have very little impact. Obviously, that is an unsatisfactory situation.  

If handing out fines to illegal online operators has so little impact, how do you propose to combat illegal gambling instead? 

We have recently launched a new program named “Disconnect” with the aim of severing the intermediate links between illegal operators and their players. Specifically, we are looking at payments, findability, and supply chains.  

While it may sound easy, disrupting payments between players and illegal operators is neither straightforward nor simple. We are currently having conversations with banks and payment service providers, and these get complicated fast. After all, banks exist, among other reasons, to process payments and transfer money between accounts. They are not eager to complicate this process without clear legal directives. Thus, we are having the most success with payment blocking for players who are still minors, because it is understood worldwide that children should not gamble.  

In addition to blocking payments from players to illegal operators, we are also looking at blocking illegal operators from paying out winnings to players in the Netherlands. But this is something that is, at best, still years away from being implemented.  

“We are also looking at blocking illegal operators from paying out winnings to players in the Netherlands” 

Naturally, we are also looking at ways to limit the online visibility of illegal operators. This, too, is far from straightforward. While some tech companies can sometimes be sensitive to regulatory pressure, there are others, such as Telegram, that are not.  

Lastly, we are looking at supply chains. In this context, the introduction of B2B licensing is certainly thinkable, but this is something that would require new primary legislation. It would also mean a lot of additional work for us – and thus additional resources – if we had to investigate suppliers that can be based anywhere in the world. Having said that, I am certainly a bit envious of the GB Gambling Commission, which does have a B2B licensing regulatory framework in place that it can use to further supervise the British market. 

In short, there are quite a few things that we are looking into regarding fighting the black market, particularly by going after the facilitators of illegal operators. After all, the Dutch Gambling Act, in addition to making unlicensed gambling illegal, expressly prohibits “facilitating” unlicensed gambling as well. It would be very, very helpful to us if new legislation were adopted that further clarifies and defines what facilitating illegal gambling precisely means.  

“It would be very, very helpful if new legislation were adopted that further clarifies and defines what facilitating illegal gambling means” 

Do you think that the black market has changed in recent years? 

Compared to a few years ago, we see that illegal operators tend to be larger and more aggressive. Some of them are actively targeting the Dutch market and, even more worrisome, highly vulnerable players specifically. For instance, players who have previously self-excluded and who can no longer make use of licensed offerings. 

We also see that illegal operators are sometimes masquerading as licensed operators, for example by using the name and branding of existing, fully licensed companies. Another concerning issue is that some of these illegal operators still ask their players to provide personal data, including full name, social security number, date of birth, et cetera. Even apart from questions regarding data security, we think that there is a real risk that players’ personal data may be used in scams or for committing identity fraud. 

If licensed operators see that they are being wholly or partially impersonated online, we ask them to report this to us as soon as possible, and we encourage them, if possible, to take legal action if their intellectual property rights are being violated. 

What part of the market in terms of players is currently being exposed to these black-market abuses? 

We currently estimate that 94% of all online players in the Netherlands exclusively make use of licensed offerings. However, the method that we use to come up with this figure is based on surveys conducted across a representative sample of the Dutch population. In other words, this is a best estimate, not a hard figure. It could thus very well be the case that, let's say, only 90% of all players exclusively play with licensed operators, which would mean that 10% of players are being exposed to significant risk.  

As you already mentioned, the recent increase in the gambling tax rate has had a significant impact on the regulated market. What is the Gambling Authority's opinion on this and next year's rate hikes? 

Eventually, we may reach a point where the tax burden will have an excessive impact on the competitiveness of licensed operators. We already see that the land-based market is certainly feeling the pressure, though things appear to be a bit better in the online segment. The tax increases appear to have had no impact, in any case, on the willingness of online operators to apply for license renewals.  

This year alone, the Netherlands Gambling Authority issued several significant fines to licensed operators over duty of care failings. How would you describe the current state of the regulated online market? 

Compared to the black market, licensed operators have a duty of care. What we see now is that compliance is quite high, and that very few excesses still occur. Unfortunately, this was not always the case.  

Some of the duty of care failings that gave cause to these fines occurred in 2022 or even 2021. Why did it take so long before you were able to publicize these fines? 

Apart from discouraging certain behaviors, fines also have a normative function: they help set and clarify standards. Fines may also serve as a warning to consumers. So yes, on a personal level I find it exasperating that it took quite a long time before we were finally able to announce our investigative findings and the resulting fines. 

“Fines also have a normative function: they help set and clarify standards” 

However, before fines become final, certain procedures must be followed including, sometimes, judicial appeals. All this takes time. Unfortunately, there is not a whole lot we can do about this.  

It is important, though, to not get hung up too much on fines. As compliance is now high among licensed operators, discussions and warnings are generally more useful in effecting changes in behavior. And that, ultimately, is what we want to happen if we see something that is not fully in accordance with the rules.  

Generally speaking, how did the fined operators fail to fulfill their duty of care obligations? 

First, these operators either missed or perhaps ignored clear signs of problematic gambling behavior. Second, they either failed to intervene entirely or only did so in a wholly inadequate manner. In short, there were problems both with detecting problematic behavior and intervening in a timely and effective manner. 

Partly because of the seriousness of the duty of care failings that we found, we decided to establish a new department named “Duty of Care – Online”. This department, among other things, organizes roundtable discussions with licensed operators and provides additional guidance to the industry on relevant topics. 

Specifically, we clarified that operators must be able to manually intervene 24/7 if players are clearly losing control. Previously, some operators left their RG desks unmanned during the night and only intervened the following morning. The rules, however, require the ability to manually intervene as soon as things get out of control. We also issued additional guidance on income assessments. Particularly which kinds of assets may or may not be counted as part of a player's income to determine whether they can afford their losses.  

The licensed industry often argues for fewer general rules and a greater focus on individualized approaches when it comes to player protection, with each approach tailored to the individual player based on the data that the operator has collected. What is your opinion on this? 

Of course, it is not unthinkable that this could work. But it assumes quite a lot. Practically speaking, I think such an approach to player protection is far too complex. I would even qualify it as utopian.  

Another major downside would be that it offers room for operators to compete on the kind of duty of care that they offer. In my opinion, that would be a very bad idea.  

When it comes to player protection, I prefer clear and straightforward rules.  

“When it comes to player protection, I prefer clear and straightforward rules” 

Lastly, in a recent speech at a conference of the International Association of Gaming Regulators, you proposed the establishment of a “gambling Interpol” to help fight the black market. Does this mean that you see a greater role for enforcement through criminal investigations and prosecutions?  

There is, of course, a reason for the fact that the Dutch legislature opted for enforcement through administrative sanctions. The Public Prosecutor's Office is already overburdened. Moreover, if we approach this through criminal law, gambling will need to compete for resources with illegal drugs, human trafficking, and similar offenses. I fear that in such a scenario gambling would lose out.  

What I meant by a “gambling Interpol” is that it would be very helpful if regulators would exchange more information, and even that we might, for instance, make direct use of the findings of our Belgian or German counterpart. This, I think, would increase efficiency and might even have a deterring effect on at least some parts of the illegal market.  

Speaking as a regulator, I think we should make use of all the advantages that we can get.